Merchant-Independent Geolocation Verification for Fraud Prevention
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Solution Overview
Problem
E-commerce systems face challenges in verifying online transactions, particularly in preventing unauthorized use of payment information, as existing methods rely on geolocation from merchant applications which do not adequately protect against fraud, as they only confirm proximity and not actual delivery address association with the user.
Innovation Solution
A system that utilizes merchant-independent user geolocation verification, where a transaction verification server, separate from the merchant server, obtains the user's geolocation from a mobile application associated with a transaction verifying entity to verify the proximity of the user to the delivery address, and determines the rate of motion to ensure the user will be at the correct location at delivery time, sending approval or rejection messages to the merchant server.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If merchant application geolocation is used to verify delivery address, then delivery address verification is simplified, but security against unauthorized transactions is insufficient
Solution Approach 1:
The patent introduces a bank application as an intermediary between the user and the merchant application. The bank application independently verifies the user's location and provides verification results to the merchant application, thereby enhancing security without complicating the overall verification process.
Solution Approach 2:
The verification process is segmented into two independent components: the merchant application handles the transaction and delivery address verification, while the bank application handles independent user location verification. This segmentation allows each component to specialize in its function while maintaining overall system security.
2Reliability
If billing address must match delivery address, then unauthorized transactions are prevented, but user flexibility is reduced
Solution Approach 1:
The patent changes the verification parameter from static billing address matching to dynamic real-time location verification. By using GPS coordinates and comparing them with the delivery address, the system allows flexible delivery locations while maintaining security through continuous location monitoring.
3Measurement precision
If geolocation proximity is verified, then delivery location is confirmed, but fraud detection capability is limited
Solution Approach 1:
The patent implements continuous feedback loops where the bank application periodically monitors the user's location and compares it with the delivery address. This ongoing verification provides real-time feedback that can detect fraudulent activities, enhancing both location confirmation precision and fraud detection capability.
Data Source
AI summary
In certain embodiments, an online transaction is verified based on merchant-independent user geolocation. A geolocation of a user associated with the online transaction is obtained from a mobile device of the user by a transaction verifying entity separate and independent from a merchant entity with which the online transaction is initiated. A server associated with the transaction verifying entity determines a proximity of the geolocation of the user to a delivery address for verifying the online transaction. The server generates a verification message including an approval message based on the proximity of the geolocation to the delivery address being within a specified threshold. The server generates a verification message including a rejection message based on the proximity of the geolocation to a delivery address exceeding the specified threshold. The server sends the verification message to another server associated with the merchant entity to carry out the online transaction accordingly.